The California Board of Equalization said it made $96.4 million in sales tax on internet commerce from September-December 2012, which is the first full quarter that the state started collecting. This is good news for the California Department of Finance, which has a forecast budget goal of $107 million in new e-taxes for the fiscal year starting July 1, 2012.

While these numbers look great for the state of California, they're a bit off from the estimates provided by a 2009 University of Tennessee study that said California would make $1.9 billion in 2012 revenue if it collected online sales tax. It also said states would miss out on $11.4 billion in 2012 revenue nationwide if they failed to collect online sales tax.

As of right now, Amazon collects sales tax in nine states (including California) and will collect in seven more over the next year.

Georgia is one the most recent to collect online sales tax. Amazon started collecting sales tax in Texas in July 2012, and California and Pennsylvania in September 2012.

Amazon has been fighting states that force it to collect sales tax for years (except in Kansas, Kentucky, New York, North Dakota and Washington). The e-tailer fled many states that attempted to force tax collection on the company, such as California and Illinois. But between states looking for ways to offset large financial deficits and brick-and-mortar stores like Best Buy complaining about Amazon being unfair competition, the issue swelled.

Amazon CEO Jeff Bezos said many times that his company would agree to collect taxes if there were some sort of federal legislation.

But eventually, Amazon finally broke down and started collecting sales tax in certain states, which allowed it to build more distribution centers within those states. For instance, Amazon announced that it would collect sales tax in New Jersey last May so that two Amazon distribution centers could be built. This led to faster shipping for customers, such as Amazon's same-day delivery program, making it more competitive than ever.

But earlier this month, Amazon and Overstock.com challenged a New York law passed in 2008, which forces companies with affiliates within the state to collect sales tax. However, Amazon said this law is unconstitutional because a 1992 Supreme Court decision said retailers that don't have a nexus of operation in a state does not need to collect sales tax. While New York said that websites with purchase buttons for Amazon as well as other national retailers are local solicitors because they receive fees for doing so, Amazon said argued that web referrals are less like solicitors or a local sales force and are more like advertising.

That's almost entirely due to the progressive income tax. If you tax rich people at higher tax rates, then states with a bigger percentage of rich people pay more taxes than they receive federal funding. States with a bigger percentage of poor people receive more than they pay out.

If the poorer states tend to be conservative and are telling you they don't want the social welfare money, while the richer states tend to be liberal and say they want to give more social welfare money, and the liberals control the government and get their way, you can't really blame conservatives for the way the numbers work out.

Well, I was only talking about the state finances, CA and NY are running horrible debt on a statewide level. Since I spend time in both I notice that many people in both states will tell you about how backward places like Utah are, yet ignore all the stupidity in their own backyard.

quote: States like CA and NY help subsidize the Federal funding for states like AK. I'm not at all defending CA or NY, just poiting out that AK is a state that takes in more dollars than it pays "back".

That is factually false. States like CA and NY actually receive a LOT more total federal funding than they pay out. The issue comes in that many sources only show "per capita" or "per resident" which makes it look like AK gets all these massive funds. When you look at the amounts actually received per state regardless of population, CA tops the charts with over $300 Billion per year. Compare that with the "#2 per capita" state of VA that received $136 Billion, less than half that of CA. When it comes to total amount actually received, AK is actually one of the lowest with an average less than $5 Billion received per year.

When it comes to AK: due to its size, most of the federal funding is not for the people but actually maintaining and protecting its massive swaths of undeveloped pristine natural lands, that really have very little impact good or bad to or from the people, and is unable to pay anything back in the process. Money received in AK actually goes towards its designated target, unlike most blue states.Reid has managed to get the same kind of funding to protect the deserts of Nevada, which he then routes to big corporate interests in Vegas and Reno.

If you look at the voting map, typical "blue" states tend to receive in the range of 30-50% more than "red" states, looking at overall funding amount, not "per capita" or "per resident" amounts.

Yeah, it's a lot more complex than debt is good/bad. You'd think the ideal case is to have no debt. But if you can borrow money cheaply (like you can right now with historically low interest rates), the ideal case is actually to rack up huge amounts of debt. The presumption is that the money you borrow can be used to increase your productivity above and beyond the interest you're paying, making it a net win. (In personal finance terms, it's like borrowing $100k from a bank which agrees to loan it to you at 1% interest, and putting the money into a CD which pays 3% interest. Yes you've picked up $100k in debt, but you're gaining a net 2% interest on it, making the debt a good deal.)

But in terms of raw debt figures, Japan is by far the worst off (government debt is over 2x GDP). They just haven't collapsed like Greece because the people are incredibly disciplined and hard working, and not prone to rioting. So lenders seen as much more likely to repay their debt, and don't panic at them being over 200% debt-to-income ratio.http://en.wikipedia.org/wiki/List_of_countries_by_...

Most of the big countries with little debt are oil-producing nations. Which should tell you something about where our economic priorities should lie.

Actually, it's a bit more complex than you described. In the current world monetary system, getting out of debt is not an option. Money is a function of debt. All of the money in the world is borrowed into existence and is extinguished when it's paid off. That is, money == debt. No debt, no money. The interest the world pays is for the privilege of having the money to trade with in the first place.

It's a concept that is so prevalent, yet so few seem to grasp, even as evidenced on a message board like this with above average intelligence posters. I strongly advise watching the documentaries Money As Debt, parts I and II. They convey the concept in a straightforward manner.

Unless you are talking about monetary reform (which IMHO is *the* issue of our times), then you are not seriously considering getting out of debt. Under the current system, being debt free is a physical and mathematical impossibility.

quote: In the current world monetary system, getting out of debt is not an option. Money is a function of debt. All of the money in the world is borrowed into existence and is extinguished when it's paid off.

That's not really a fair characterization of how it works.

Money is a representation of productivity. When productivity increases (via technological improvements or better distribution of goods - e.g. dairy farmer and apple farmer agree to swap milk for apples), the money supply has to be increased to keep its representation proportional to actual productivity. You increase the money supply by issuing debt, which creates more money.

Unfortunately, governments have figured out that they can create the appearance of increased productivity by increasing debt. This results in increased inflation (money is worth less). In strictly neutral terms, money is still a representation of productivity, it's just that the ratio of dollars to a fixed unit of productivity has changed.

"You increase the money supply by issuing debt, which creates more money."

I understand how debt issuance works, and obviously so do you. Ditto for inflation.

But my problem with the current system is that money cannot exist without debt. I would prefer that money be a representation of value, for the productivity you mentioned, rather than being a liability that must be paid off. Remember, when it's paid off, it's extinguished. True, value-based money would exist perpetually, it would simply be "there" forever. Could you imagine the productivity and stability we'd see if the entire world wasn't continually obsessing over, and dedicating futile effort to, its debt burden?

I stand by my original point, no debt == no money. We need serious monetary reform. Give those documentaries I mentioned a try, it'll help explain.

Actually the U.S. is the worst in terms of current annual budget deficit as a percentage of GDP, which is what was being discussed. Total debt is a different story, and I never said the U.S. had the most total debt in terms of GDP. You should probably improve your reading comprehension skills.

Its probably important to note that Libyans killed Gaddafi, not the US. He was captured by Libyans, then shot by a mob of Libyans. It is true that the US had too much involvement in the process, but we're only in the business of assassinating people that are politically valuable targets. If it doesn't get votes for the party that does the killing, they aren't going to waste the jet fuel.

Anyway... I foresee California pissing away a good chunk of this cash flow. So far San Diego was the only city to actually put itself out of debt (or at least for the most part). It's the only city I considered working LEO in.

MN isn't exactly a shining star. We don't make any tough choices here. We just kick the can down the road. Telling someone "I'll pay you tomorrow instead of today" isn't balancing a budget. And borrowing against future tobacco settlement payments doesn't make the tough choices on what the role of government should be and how we'll then fund such a beast.

quote: Also, care to tell us which government in the world has a positive balance sheet i.e. zero debt?

Which government in the world? There are many small/local governments (cities, counties, even a few states) that are doing just fine from a budget perspective. Are you really trying to excuse California because you think it's impossible for any government to spend less than the tax revenue it collects? Or did you really have no point at all?

I do it every day. I spend less than my income. I put money into savings for a rainy day when it's needed. I put money into my retirement account since I'm not stupid enough to think SS will be around or even sufficient to live off of.

Millions of SELF-RESPONSIBLE/SELF-RELIANT Americans live within their means every day. It can be done and we SHOULD expect our government to do the same.

Step 1: Start by sending less of OUR tax dollars beyond our boarders. $1.5 Billion is going just to Egypt this year. They just received 20 F-16 jets as part of the "Gift".

Charity begins at home first. Once all your responsibilities are met...then AND only then should you help others IMO.

The fixed annual income vs expenses model for personal finances doesn't really apply when you get up to government or even corporate levels of income and expenses. When you're talking about economies that large, the old adage "you have to spend money to make money" on average prevails. Yes you can balance your budget by cutting spending, but frequently the better way for a company to get back into the black is by increasing spending. You just need to increase it in a way which results in increased sales. And if you do it right, the increase in sales revenue will exceed the increase in spending, resulting in a net reduction in debt.

Unfortunately, our government is pretty bad about spending money in ways which increase revenue (productivity). If social programs truly were a safety net, they'd increase productivity (by preventing people from falling off the cliff and becoming homeless non-productive members of society). But arguably they've become a way of life for a large segment of the population, thus representing a net drain (my personal opinion is we need a lifetime limit on how much you can get in social benefits). Likewise, aside from tangential technological improvements like GPS, defense spending isn't really productive unless you're actually fighting someone with all that military hardware you're buying.

"Unfortunately, our government is pretty bad about spending money in ways which increase revenue (productivity)."

You hit the nail on the head. It is for that exact reason that I nearly puke every time I hear someone parrot the narrative that government spending will create jobs. Sure, they occasionally do something good, like infrastructure. But as you mentioned, the bulk of it goes to welfare/warfare/lawsuits/tax compliance which is a complete squandering of the nation's productive resources. The government cannot allocate resources better than the market. If they could, there'd be no need for a market economy.

Governments need to understand they cannot spend their way out of debt.

From the sound of your post, you don't live in California, so you don't know what you're talking about. Guess what? I do, and I can assure you our state is filled with the dumbest voters in the nation, who in turn elect the dumbest legislators.

Promise them any sort of freebie at their neighbor's expense, and they will vote for you. Drag a kid in front of any initiative, and they'll support it. They vote 100% of the time based on raw emotion without ever considering the economic impact of anything they do. Then they turn around and wonder why our state is a mess. It has to be one of the worst run states in the country, trust me.

As far as what to do? Here are a few solutions (that you implicitly think aren't valid).

-Cut the pay of every state employee that makes more than the Governor down to his pay level. For example, the current head of the local transit agency in my city makes as much as the President. Most university heads are in that range also.

-California has 1/10 of the nation's population, but has 1/3 of the welfare cases. Eliminating the welfare state would balance the budget overnight.

-Full legalization of pot, and cease all wasteful and expensive law enforcement activities prosecuting it.

-Eliminate collective bargaining (unionization) of all public employees, as well as pensions for all new employees.

-Use the savings to take the debt to ZERO (ignore the propagandizing of Wall Street shills telling us some debt is good).

-Begin to reduce taxes back to a reasonable level and stop using the working people of the state as a financial punching bag.

The problem is with pseudo-intellectual, defeatist, nihilists like yourself who simply throw up their hands and act like there's nothing we can do. There are plenty of solutions, just no guts to try them out.

Thanks half_duplex. I've never been to FLA, but have heard great things. A friend is moving there shortly, and I plan to go visit him and check things out. I'm seriously considering it as a new home. I'm done with this socialist third world welfare slum.

Imagine the new economic growth this new revenue will stimulate when the california liberals start "investing" in solar panels, electric cars and self-fcuking vag1nas (to empower women with more of that 'out of the kitchen' independence).

Local & State governments were banking on Prop 30 passing, the so called "for the schools" proposition, total BS. Same with the online sales tax collection, this money will go to fund pension obligations and along with the "you owe us" "we took a cut on our increase" "we didn't get our COLA increase this year" this money will run out very quickly. The next scam being worked on in Kalifornia is to get rid of the Property Tax increase limits. Charge people 10-15K per year in Property Taxes and this state will become a ghost state.